The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Aulhority £ K D r d x r ISli&p' 7 COHFTDENTIAI. TENTATIVSHBfefeFT SUBJECT TO CHAM>E MINUTES OF THE MEETING- OF THE EXECUTIVE COMMITTEE OF THE FEDERAL OJFEN MARKET COMMITTEE HELD AT WASHINGTON, D. C. JANUARY 3, 1956.______ 11 3/3 4 The meeting was called to order at 10:37 a, m., there being present Governors Young, Fleming, Seay, and Schaller, and Deputy Governor Burgess, Secretary, Mr. Burgess explained that Governor Harrison was unable to be present because of illness. On motion Governor Young was designated chairman pro tem. ^~Mr. Burgess reported that the Federal Reserve Bank of St. Louis was desirous of increasing its participation in the System account by #15,000,000 in order to better its earnings It was agreed that the committee would have no objections if the New York and Chicago banks, which had a considerable overage in their holdings on the basis of the formula now used, were willing to reduce their participations by this amount. There ensued a brief discussion of Treasury financing in anticipation of a later meeting with the Treasury. There was also a brief discussion of the practice which might be followed by the Treasury with respect to government deposits in the Reserve banks. At 11:00 o ’clock the meeting adjourned to meet with the Secretary of the Treasury in his office, there also being present; Governor Eceles, Under Secretary Coolidge, and Messrs. Viner, Bell and Upham in behalf of the Treasury. There was first an informal discussion with respect to the amount of balances the Treasury should keep with the Reserve Banks and the relation of that Question to Federal reserve policy concerning excess reserves, '"it was generally agreed that it should not be the function of the Treasury to manage excess reserves, but Dr. Viner raised the question whether the Treasury should not stand ready to 3 / Reproduced from the Unclassified I Declassified Holdings of the National Archives d e c l a s s if ie d Authorit y Q c O r d ^ i a ^ t 2 increase or decrease its balances at the request of the Federal Reserve System as a means of supplementing their credit policy. It was agreed, however, that this question needed mature consideration in view of the possible difficulties or public misunderstandings which might arise with respect to such an undertaking. It was suggested that the question might well be discussed by the next meeting of the Federal Open Market Committee. In the meantime Secretary Morgenthau indicated that the Treasury in tended to keep its balances in the Reserve Banks as nearly as possible between |500,000,000 and $600^000,000. Those present were in agreement with this. There then ensued an informal discussion of the Treasury financing program and especially the question of sales of additional Treasury bills. final conclusion was reached. The meeting adjourned at 12:05 p, m. W. Randolph Burgess Secretary. No
@FedFRASER